Colorado Regulators Approve Updated Xcel Energy Plan with Early Coal Retirements

Denver, Colorado — Today, the Colorado Public Utilities Commission (PUC) concluded its deliberations for Xcel Energy's electric resource plan, bringing Phase 1 of the planning process close to an end, with a written decision likely coming next month. Sierra Club and Natural Resources Defense Council (NRDC) signed on to the updated settlement that the PUC voted to approve with slight modifications. The updated settlement will accelerate the retirement of the Comanche 3 coal unit in Pueblo to no later than January 1, 2031 while providing tax payments to Pueblo through 2040. All three PUC commissioners voted earlier this month supporting the early closure date.

“Colorado's largest coal plant has unfairly been in Pueblo's backyard for over a decade now,” says Pueblo City Council Member Vicente Martinex Ortega. “It's a big deal that Pueblo leaders, labor leaders, environmentalists, and Xcel were able to reach an agreement to retire it early that will both reduce harmful pollution in our neighborhoods while also continuing to support our local economy and its workers. Looking forward, we should be doing everything we can to make sure this transition results in clean energy jobs right here in Pueblo.”

Comanche 3's exact closure date will be set in a "Just Transition'' proceeding at the PUC that will begin in 2024. For now, if Comanche 3 were to operate until Jan 1, 2031, it would be the last coal plant to burn coal in Colorado. Xcel's analysis shows that early retirement of Comanche 3 will save ratepayers an additional $53 million compared to the original settlement, will save $183 million when accounting for the social cost of carbon, and will avoid the pollution of 1.7 million tons of carbon dioxide, 55,708 tons of NOx, and 67,488 tons of SO2 pollution.

Read more about the updated settlement here.

"Early coal closure with support for workers and tax revenue for Pueblo is one of the best outcomes for Latino public health in Colorado," says Ean Thomas Tafoya, Colorado State Director of GreenLatinos. "The proposed deal creates opportunities to organize for more clean energy, air and water in Colorado at the PUC in the coming years."

"It is long overdue for Xcel to work towards the health and safety of disproportionately impacted communities. This is a step in the right direction -- implementation and continual community modeling away from industry's past harms will be key to meet our community and climate goals to protect future generations and the Biosphere." says Renée Millard-Chacon, Womxn from the Mountain Co-Founder and environmental justice advocate.

Xcel's initial 2021 settlement agreement received backlash from climate groups. Concerned residents, including many living in areas where Xcel's fossil fuel plants cause dangerous pollution, sent in over 1,000 public comments to the PUC and led protests. The initial plan proposed burning coal at Comanche 3 until 2034, and modeled new gas plants to burn gas long past Xcel’s goal of 100% carbon free electricity by 2050.

"These deliberations have been historic for Colorado because our state is now on the path to being coal-free close to the end of this decade." says Ren Smith, Organizing Representative for the Sierra Club's Beyond Coal Campaign. “But Xcel's transition from coal can't just be a transition to another expensive, polluting fossil fuel like methane gas. We need to make sure that Phase II of this planning process sets our state’s biggest utility up to deliver 100% renewable and affordable electricity to Coloradans."

Following a Phase I written order next month summarizing the issues the PUC verbally voted on, Phase II of Xcel's resource plan will start later this year when the utility will propose possible new energy resources to replace retiring coal plants and meet new electricity needs. Investing in renewable energy, energy storage and electrification instead of methane gas will be crucial in achieving the climate and health benefits Colorado expects to see by retiring coal plants.

Climate advocates warn that overcommitting to new gas resources could worsen Colorado’s recently downgraded air quality, create expensive burdens on ratepayers as gas prices reach record highs, and perpetuate environmental racism. Xcel Energy's existing gas plants on the Front Range disproportionately pollute lower-income communities of color.

"All in all, the terms of this settlement will result in a 90% reduction of Xcel's emissions in Colorado by 2031," says Alana Miller, Colorado climate policy director for NRDC (Natural Resources Defense Council). "It is a key milestone in the effort to accelerate Colorado’s transition from fossil fuels, while also saving customers money and providing meaningful assistance to coal communities."